Market Monday: Dig It
This week, an attempt to extract the meaning from beneath the New York auctions' avalanche of noise...
In the bid-sector equivalent of Chris Farley's beloved "Fat Guy in a Little Coat" gag, Christie's and Sotheby's stuffed two weeks' worth of sales into one so-called "gigaweek" at their respective NYC headquarters. The auctions ranged in genre from Impressionist & Modern to Postwar & Contemporary, plus specialty numbers like the (paradoxically successful) "Bound to Fail," organized by Christie's themed-sale shaman Loic Gouzer. I'm going to level with you: The more auctions I cover and the more I grasp about their financial arcana, the less sure I am of how to locate anything the least bit relevant in the public results. Case in point: The best summary I found this time comes from the always-intrepid (though never-concise) Kenny Schachter. But if we zoom out of his signature grab-bag of anecdotes and industry gossip, we're still left to reconcile his opening statement that the week's overall auction performance graded out to "a solid B"... with his comment about 1,000 words later that, if out-of-nowhere Japanese collector Yusaku Maezawa hadn't single-handedly blown $81.4M on acquisitions, "the week would have been an utter bloodbath." Wait, what?! Dissonant as that message seems at first, however, I think there's actually no better takeaway about auctions' significance than realizing that one completely unexpected free-spender can be the difference between congratulatory champagne toasts and a nightmarish pile of mismatched limbs. Ultimately, all that matters at week's end are the optics the players leave with––and this time, the picture seems to have been just pretty enough to invite pleasant dreams about the months ahead. [artnet News]
While physical gavels were hammering down deals in Manhattan, digital auction platforms Auctionata and Paddle8 finalized a merger that reshapes the online bidding space. Taken together, the two startups boasted roughly 800,000 users and $140M in sales in 2015. Rather than try to clash with Christie's and Sotheby's at the high end of the market, though, the new yet-to-be-named conglomerate will reportedly aim to dominate e-commerce for midlevel luxury goods. Whether or not the alliance succeeds, its mere existence proves that physical galleries and museums are hardly the only art businesses that now feel pressured to, in the words of Alain Servais,grow or go. Expect more digital consolidation in the months and years ahead. [The New York Times]
In other auction news: Sotheby's reported dismal Q1 results on Monday, lowlighted by a $26M net loss that fulfilled CEO Tad Smith's Q4 2015 warning that the house "will likely have one or more difficult quarters as [it] ride[s] through the current cycle." Amid her thorough analysis of the company's latest financial details, Lee Rosenbaum discovered an interesting reversal of opinion buried in its quarterly report: namely, that despite Smith's assurances to the contrary in November, Sotheby's now acknowledges that its choice to voluntarily hemorrhage staff via last year's buyout program "could adversely impact [its] ability to compete" going forward. As I wrote when predicting serious turbulence for Sotheby's after Tobias Meyer's exit two and a half years ago, success in every sector of the art industry still primarily depends on relationships. Sounds like Smith and wizard-behind-the-curtain Dan Loeb may have finally woken up to that truth. The only question now is whether the epiphany arrived too late. [CultureGrrl]
Speaking of the power (and intrigue) of personal ties in the business, Greg Allen did a fascinating deep dive into the theft of Jasper Johns's first-ever flag painting. The piece made its gallery debut in 1955 inside the nearly literal Trojan Horse of Robert Rauschenberg's Combine "Short Circuit." But ten years after their inaugural exhibition, Johns's flag––and only Johns's flag––was allegedly stolen out of Rauschenberg's work while the two were nestled together in storage. The painting has never been recovered. Stranger still for one of the most influential and valuable works in the entirety of postwar American art, almost no one seems to have searched for it in the past 51 years. I won't wreck the ending of Allen's piece for you, but to me the entire episode stands as a testament to how the industry would often rather self-police in the shadows than turn sensitive matters over to outsiders––a tendency that still very much persists today. [ARTnews]
That's all for this edition. Til next time, keep shoveling the nonsense away from what matters most.